01—Abstract
Summary
Summary of the 10-K filed February 17, 2022. Cited figures are marked; the original filing is the authoritative source.
Consolidated Edison, Inc. (Con Edison) reported its 2021 fiscal year results, highlighting a stable performance from its core utility operations (CECONY and O&R) which form the majority of its business.
The company continues to invest in infrastructure to ensure reliability and resilience, particularly in the face of climate change impacts like severe weather events. Con Edison is actively managing its Clean Energy Businesses and Con Edison Transmission segments, with strategic alternatives being considered for the former and impairments noted in the latter due to specific project challenges (e.g., Mountain Valley Pipeline).
Regulatory frameworks in New York and New Jersey remain central to operations, influencing rate plans and cost recovery, with the company actively engaged in rate case filings to support future investments. The company's financial position remains solid, supported by consistent dividend payments and access to capital markets, though it is navigating the ongoing impacts of the COVID-19 pandemic on customer payments and supply chains.
02—Key points
Key Highlights
- Con Edison's primary revenue streams are derived from its regulated utility operations, CECONY and O&R, which serve millions of customers in New York and New Jersey.
- The company is making significant capital investments in its infrastructure, focusing on reliability, resilience, and adapting to climate change, including initiatives like the 'Reliable Clean City' projects.
- Strategic alternatives are being evaluated for the Clean Energy Businesses, indicating a potential shift in focus or portfolio management within this segment.
- Con Edison Transmission experienced impairments on investments in projects like the Mountain Valley Pipeline, impacting its financial results.
- Regulatory proceedings, including rate case filings and the implementation of clean energy goals (e.g., New York's Climate Leadership and Community Protection Act), are key drivers of the company's operational and financial planning.
- The company's financial performance in 2021 was impacted by factors including higher operating and maintenance expenses, but also benefited from rate increases and the recovery of late payment charges.
- Con Edison maintained its commitment to shareholder value through consistent dividend payments, though its stock performance slightly lagged market indices in 2021.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 17, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $13.68B$12.25B | +11.7% |
| R&D Expenses | $25.00M$24.00M | +4.2% |
| Operating Expenses | $10.85B$9.59B | +13.1% |
| Operating Income | $2.83B$2.65B | +6.5% |
| Interest Expense | $930.00M$1.02B | −8.7% |
| Net Income | $1.35M$1.10B | −99.9% |
| EPS (Basic) | $3.86$3.29 | +17.3% |
| EPS (Diluted) | $3.85$3.28 | +17.4% |
| Shares Outstanding (Basic) | 348.40M334.80M | +4.1% |
| Shares Outstanding (Diluted) | 349.40M335.70M | +4.1% |
05—Questions
Frequently Asked Questions
What are Con Edison's main business segments and how do they contribute to revenue?
Con Edison's primary business segments are its regulated utility operations, Consolidated Edison Company of New York, Inc. (CECONY) and Orange and Rockland Utilities, Inc. (O&R), which account for the vast majority of revenue and assets. It also operates Con Edison Clean Energy Businesses and Con Edison Transmission. CECONY focuses on electric, gas, and steam delivery in New York City and Westchester County, while O&R provides electric and gas delivery in southeastern New York and northern New Jersey. The Clean Energy Businesses develop renewable energy projects, and Con Edison Transmission invests in electric transmission projects.
What major investments or capital expenditures is Con Edison undertaking?
Con Edison is undertaking substantial capital investments primarily to maintain and enhance the safety, reliability, and resilience of its electric, gas, and steam delivery systems. These investments also support programs for customer energy management, integration of clean energy technologies, and climate change adaptation. Specific investments include projects to address identified reliability needs, such as the 'Reliable Clean City' (RCC) projects for CECONY, and transmission projects for Con Edison Transmission.
How are the company's clean energy initiatives and environmental goals impacting its operations?
New York State's Climate Leadership and Community Protection Act (CLCPA) sets ambitious goals for renewable energy procurement and emissions reduction, which Con Edison is actively working to align with. This includes investing in renewable projects through its Clean Energy Businesses and considering how its gas infrastructure will fit into future decarbonization pathways. The company is also focused on energy efficiency, electric vehicles, and energy storage as part of its 'Reforming the Energy Vision' (REV) strategy. Climate change risks, such as sea-level rise and extreme weather, are also being managed through vulnerability studies and adaptation plans.
What financial risks or challenges does Con Edison face?
Con Edison faces several financial risks, including regulatory risks related to rate plans not providing a reasonable return, potential adverse changes to approved rate plans, and the possibility of substantial penalties for regulatory non-compliance. Operational risks include potential damage to facilities, cyberattacks, and failures in processes or systems. Financial risks also include interest rate fluctuations, commodity price volatility, substantial unfunded pension liabilities, and the need to access capital markets to fund significant capital requirements. The company is also managing the financial impacts of the COVID-19 pandemic, including increased allowances for uncollectible accounts.
What is the company's strategy regarding its Clean Energy Businesses?
Con Edison is currently considering strategic alternatives with respect to its Clean Energy Businesses. This suggests the company is evaluating various options, which could include divesting, restructuring, or seeking new investment for these renewable energy development and generation assets, aiming to optimize its portfolio and financial performance.
06—Continue